NAII Sends Asbestos Bill Objections To Senators

By Steven Brostoff, Washington Editor

NU Online News Service, July 15, 3:34 p.m. EDT, Washington?The National Association of Independent Insurers is urging the Senate leadership to rewrite pending asbestos legislation in order to assure certainty and finality in asbestos litigation.

In a letter to Senate Majority Leader Bill Frist, R-Tenn., Carl Parks, senior vice president of government relations for the Des Plaines, Ill.-based NAII, said that the legislation approved recently by the Senate Judiciary Committee, S. 1125, expands the scope and cost of a proposed trust fund to the point that it may be more costly and inefficient than the current broken system.

"Amendments added by the Judiciary Committee greatly increase the scope and cost of the fund, to the point where there is no longer either an upper limit to the fund nor any real estimate of total cost," Mr. Parks said.

He said that medical criteria for compensation were loosened to the point where many plaintiffs with dubious connections to asbestos may now file claims and recover awards.

Moreover, Mr. Parks said, a financial backstop added to the bill eliminates any certainty or finality associated with the trust fund.

Finally, he said, the legislation now has an automatic back door return to the tort system should the fund run short of money.

Mr. Parks reiterated that these changes make the proposed system potentially more costly than what exists today.

"The initial objective of developing a more equitable way of distributing scarce resources to asbestos victims who are truly sick, instead of those who are not, appears to have been lost," he wrote.

Mr. Parks urged Sen. Frist to work with the House leadership to develop effective litigation management provisions, a system that achieves true finality for businesses and insurers, and fairly compensates victims in a timely manner.

Originally, S. 1125 envisioned a $108 billion trust fund to resolve asbestos-related claims based on specified medical criteria. However, amendments approved by the Judiciary Committee increased the size of the fund to $153 billion.

Moreover, insurance companies could be hit with an additional $1 billion annual assessment if the fund is not large enough to compensate all claimants.

Special Reports /

NAII Sends Asbestos Bill Objections To Senators

Related Stories

Recommended For You